Self-made Boca Raton millionaire declared a fugitive

File photo: Atul Bisaria. (Shubh Hotels )

March 9, 2013|By Jon Burstein, Sun Sentinel

A suburban Boca Raton businessman who became a millionaire in the hotel business is now a fugitive accused of fraud.

A federal judge declared Atul Bisaria a wanted man after the hotelier failed to show up for court hearings following his October indictment in Illinois on 10 criminal charges. He's accused of securing hefty bank loans to renovate two of his hotel properties, then submitting phony invoices for construction work never done.

Those dummy invoices led to two banks disbursing more than $9 million to Bisaria's companies, according to federal prosecutors who allege he used at least some of the money to fund unrelated real estate projects.

Among the allegations is that Bisaria lied about buying nearly $2 million of structural steel to renovate his Boca Raton hotel.

One of Bisaria's attorneys said last week that his client is not running from the law. Bisaria, 53, has been in India, his native country, for at least eight months, while his family has remained in South Florida, said attorney Keith Grumer.

"He's there attending to intimate personal affairs and he will immediately make himself available when those matters are addressed," Grumer said. "Things move differently in India than our country ... The charges were filed while he was over there and we've advised the government of his desire to cooperate. He believes in his innocence."

Bisaria owns a $2.2 million home with its own tennis court in the exclusive Long Lake Estates community west of Boca Raton. He served on the board of Saint Andrew's School, a private school in Boca Raton, before resigning in October, according to the school.

Bisaria has spent more than two decades in the hotel business, starting off in management and working his way up to owning a portfolio of more than $150 million in properties, Grumer said.

Just a few years ago, Bisaria owned hotels that weren't just places to stay, they were spots with storied histories in their communities.

The former Hilton Pittsburgh, the city's largest hotel, stands near where the famed three rivers meet. The Cornhusker is the oldest and best-known hotel in Lincoln, Neb. The Hotel Pontchartrain in Detroit was where the elite once would mingle when they went to the "Top of the Pontch" for the view.

He lost each of those hotels in the past few years to bankruptcy or foreclosure. The only property he has left is The Guest Suites of Boca Raton, a 180-room hotel near Interstate 95 and Yamato Road. He's spent the last four years staving off a bank's attempt to foreclose on the property.

Grumer said Bisaria had been highly leveraged when the economic downturn crippled not only his hotels, but the hospitality industry in general. Bisaria sought to hold onto his assets, and in the process, generated the disputed invoices at the direction of officials at Illinois-based Mutual Bank, Grumer said.

Bisaria has become "one of the roadside casualties" in a federal investigation of the bank, Grumer said.

Bisaria obtained nearly $60 million in loans from Illinois-based Mutual Bank before authorities shut it down in 2009. The Federal Deposit Insurance Corp. has filed suit against eight former directors of the bank accusing them of gross negligence. Among the accusations against the Mutual Bank officials is that they gave Bisaria high-risk loans without doing due diligence.

An attorney attempting to recover the money lost in those loans said the criminal case against Bisaria is simple — he submitted fraudulent invoices. Bisaria claimed to have bought nearly $2 million of structural steel for renovations at his Boca Raton hotel yet no steel could be found when a court-appointed receiver inspected the property, said Michael S. Popok, an attorney for United Central Bank, which took over Mutual Bank's assets.

"This is a fraud scheme," Popok said.

United Central Bank already has obtained a $35.9 million judgment against Bisaria and his wife for loans taken out for the Hotel Pontchartrain.

Popok said it's not clear where the missing money went. The bank accounts of Bisaria's various holdings have little, if no, money in them.

An Illinois grand jury indicted Bisaria on five counts of fraud and five counts of lying on loan documents. If convicted of any of the 10 charges, Bisaria could face up to 30 years in prison.

Charged along with him is Steve Lewis, the owner of Contract Purchasing and Design Inc., a Boca Raton interior design and decorating firm.

Lewis has pleaded not guilty to the charges and is free on a $4,500 bond. Bisaria would have obtained a similar bond if he had appeared in court, court records show.

After he missed three court hearings at the federal courthouse in Chicago, U.S. District Judge Suzanne B. Conlon ruled in January that Bisaria was a fugitive.

Grumer said Bisaria is in the process of negotiating with authorities over his return to the United States.

"[Bisaria] is returning and he's going to turn over substantial documents and fully cooperate," Grumer said.